Exclusive: Wahaha Heiress’s Confidant Investigated for Disciplinary Violations
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A top executive central to the operations of Hangzhou Wahaha Group Co. Ltd. is under investigation for disciplinary violations, adding to a series of headwinds for Zong Fuli since she took the helm of her late father’s beverage empire.
Yan Xuefeng, production center director at Hongsheng Group Co. Ltd. and a confidant of the heiress, is being investigated by a Hangzhou district discipline inspection commission, sources told Caixin. Hongsheng is Wahaha’s core operating entity and controlled by Zong. Yan also holds supervisory roles in nearly 190 Wahaha-affiliated companies, according to business records.
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- Yan Xuefeng, a key executive managing operations for Wahaha, is under investigation for disciplinary violations and has restrictions on travel and job changes.
- The probe comes amid internal power struggles after Zong Qinghou's death, intensified by restructuring that redirected profits to entities controlled by his daughter, Zong Fuli.
- Wahaha’s Zhejiang water affiliate saw monthly revenue drop over 60% year-over-year after a distribution change in June 2024.
- Hangzhou Wahaha Group Co. Ltd.
- Hangzhou Wahaha Group Co. Ltd. is a Chinese beverage giant currently experiencing internal strife. Its core operating entity, Hongsheng Group Co. Ltd., is controlled by Zong Fuli, the daughter of the late founder. The company is facing challenges due to Zong Fuli's restructuring efforts, including relocating staff and production, and abandoning the "Wahaha" brand, which has created tension with long-standing shareholders.
- Hongsheng Group Co. Ltd.
- Hongsheng Group Co. Ltd. is the core operating entity of Wahaha, controlled by Zong Fuli. Yan Xuefeng, its production center director, is under investigation for disciplinary violations. Hongsheng fully owns Xun'er Chengtong, an exclusive distributor for Wahaha's barreled water affiliate. This arrangement, implemented by Zong, redirects significant profits to Hongsheng, impacting Wahaha's other shareholders and the water affiliate's revenue dramatically.
- Xun'er Chengtong
- Xun'er Chengtong is a company managed by Yan Xuefeng, an executive at Hongsheng Group. It serves as the exclusive distributor, wholly owned by Hongsheng, for Wahaha's barreled water affiliate in Zhejiang. Since April, distributors have directed payments to Xun'er Chengtong for purchases, a move that observers suggest diverts profits from the Wahaha water affiliate to an entity controlled solely by Zong Fuli, the current head of Wahaha. This change has significantly impacted the water affiliate's revenue.
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